Commission’s position on the restructuring of EDF

Commission’s position on the restructuring of EDF

A document by the Agence des participations de l’État – the French State Holdings Agency – summarising the positions of the Commission’s Directorate-General for Competition on the planned restructuring of EDF, the leading French energy supplier, has been leaked to the press. This document describes the Commission’s requirements as being a genuine first step towards dismantling and privatising the group.

Firstly, the Commission would apparently like to see the privatisation of EDF’s most profitable subsidiaries (renewable energy and distribution), while leaving the strategic but highly loss-making nuclear part of the group to the state. It apparently considers that the subsidies granted to the nuclear sector give an undue economic advantage to the other subsidiaries.

Secondly, in the name of opening up to competition, the Commission would like ‘a holding company with no operational role or control over its subsidiaries’, thus preventing the state from governing EDF’s subsidiaries.

On 26 October 2020, Members of the European Parliament (MEPs), Jean-Lin Lacapelle, Jean-Paul Garraud, Julie Lechanteux, Gilles Lebreton, Aurelia Beigneux, Jerome Riviere, Annika Bruna, Herve Juvin, Helene Laporte, France Jamet, Catherine Griset, Andre Rouge and Virginie Joron of the Identity and Democracy Group raised a written parliamentary question to the European Commission. 

The Parliamentarians enquired “can the Commission confirm the accuracy of this information?” and “if so, in its opinion, what economic advantages does the state’s financial support to the nuclear sector give to the other EDF subsidiaries?” 

Finally, the MEPs asked the Commission “does it not think the proposed measures will lead to a worsening of France’s public accounts and to a weakening of the subsidiaries of the group that were previously ‘advantaged’?”

On 19 November, Executive Vice-President of the European Commission Margrethe Vestager (A Europe Fit for the Digital Age) responded on behalf of the European Commission. In her answer, she stated that “the Commission and the French authorities are in contact to discuss a reform on the regulated access to nuclear energy” and added that “the ongoing contacts relate in particular to whether the reform complies with state aid rules”.

Executive Vice-President Vestager explained that “state aid procedure is a bilateral procedure between the Member States (in this case France) and the Commission and details on contacts between the Commission and the Member State in question cannot be shared for confidentiality reasons” and that “the Commission is therefore not able to confirm any information received”. She also clarified that “the European Treaties, including competition rules, are neutral when it comes to ownership of a company and state aid rules apply equally whether it is public or privately owned”.

In closing, Executive Vice-President Vestager declared that “to find a state aid measure compatible with the internal market, the Commission must ensure that the aid measure does not unduly distort competition and trade and is proportionate to the objective at stake”.

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